Question 1

Which of the following is not a correct statement about the growth of real GDP in the U.S.economy?

Accepted Answer

A)   Real GDP in 2004 was almost four times its 1965 level.
B)   Growth was steady between 1965 and 2004.
C)   Continued growth in real GDP enables the typical American to enjoy greater economic prosperity than his or her parents and grandparents did.
D)   The output of goods and services produced grew on average about 3.2 percent per year between 1965 and 2004.E) C) and D)
F) A) and B)

Question 2

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Accepted Answer

A) True 
 B)False

Question 3

U.S.GDP excludes the production of most illegal goods.

Accepted Answer

A) True 
 B)False

Question 4

National income differs from net national product in that it includes business subsidies and excludes

Accepted Answer

A)   profits of corporations.
B)   indirect business taxes.
C)   retained earnings of corporations.
D)   depreciation.E) A) and B)
F) A) and D)

Question 5

If a state made a previously-illegal activity,such as gambling or prostitution,legal,then,other things equal,GDP

Accepted Answer

A)   necessarily decreases.
B)   necessarily increases.
C)   doesn't change because both legal and illegal production are included in GDP.
D)   doesn't change because these activities are never included in GDP.E) None of the above
F) C) and D)

Question 6

The value of goods added to a firm's inventory in a certain year is treated as

Accepted Answer

A)   consumption,since the goods will be sold to consumers in another period.
B)   saving,since the goods are being saved until they are sold in another period.
C)   investment,since GDP aims to measure the value of the economy's production that year.
D)   spending on durable goods,since the goods could not be inventoried unless they were durable.E) All of the above
F) C) and D)

Question 7

Greg,a U.S.citizen,works only in Canada.The value of the output he produces is

Accepted Answer

A)   included in both U.S.GDP and U.S.GNP.
B)   included in U.S.GDP,but it is not included in U.S.GNP.
C)   included in U.S.GNP,but it is not included in U.S.GDP.
D)   included in neither U.S.GDP nor U.S.GNP.E) C) and D)
F) B) and D)

Question 8

In the actual economy,households

Accepted Answer

A)   spend all of their income.
B)   divide their income among spending,taxes,and saving.
C)   buy all goods and services produced in the economy.
D)   Both (a) and (c) are correct.E) A) and D)
F) B) and D)

Question 9

Table 23-3
The table below contains data for the country of Wrexington for the year 2008.
 
-Refer to Table 23-3.What were Wrexington's government purchases in 2008?

Accepted Answer

A)   $1130
B)   $1601
C)   $1837
D)   $2544E) A) and B)
F) A) and C)

Question 10

Darla,a Canadian citizen,works only in the United States.The value of the output she produces is

Accepted Answer

A)   included in both U.S.GDP and U.S.GNP.
B)   included in U.S.GDP,but it is not included in U.S.GNP.
C)   included in U.S.GNP,but it is not included in U.S.GDP.
D)   included in neither U.S.GDP nor U.S.GNP.E) A) and D)
F) A) and C)

Question 11

Table 23-5
The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006.
 
-Refer to Table 23-5.In 2007,Batterland's real GDP was

Accepted Answer

A)   $540.
B)   $700.
C)   $810.
D)   $1050.E) None of the above
F) All of the above

Question 12

In computing GDP,market prices are used to value final goods and services because

Accepted Answer

A)   market prices do not change much over time,so it is easy to make comparisons between years.
B)   market prices reflect the values of goods and services.
C)   if market prices are out of line with how people value goods,the government sets price ceilings and price floors.
D)   None of the above is correct;market prices are not used in computing GDP.E) C) and D)
F) B) and D)

Question 13

Suppose the government passes a law eliminating holidays and,as a result,the production of goods and services increases because people work more days per year (and thus enjoy less leisure per year) .Based on this scenario,which of the following statements is correct?

Accepted Answer

A)   GDP would definitely increase,despite the fact that GDP includes leisure.
B)   GDP would definitely increase because GDP excludes leisure.
C)   GDP could either increase or decrease because GDP includes leisure.
D)   GDP could either increase or decrease because GDP excludes leisure.E) A) and C)
F) None of the above

Question 14

If consumption is $1800,GDP is $4300,government purchases are $1000,imports are $700,and investment is $1200,then exports are $300.

Accepted Answer

A) True 
 B)False

Question 15

Between 1929 and 1933,NNP measured in current prices fell from $96 billion to $48 billion.Over the same period,the relevant price index fell from 100 to 75.
a.
What was the percentage decline in nominal NNP from 1929 to1933?
b.
What was the percentage decline in real NNP from 1929 to 1933? Show your work.

Accepted Answer

a.
NNP measured in current prices is nom...

Question 16

Consumption consists of spending by households on goods and services,with the exception of

Accepted Answer

A)   purchase of intangible services.
B)   purchases of durable goods.
C)   purchases of new houses.
D)   spending on education.E) None of the above
F) A) and D)

Question 17

For an economy as a whole,income must equal expenditure because

Accepted Answer

A)   the number of firms is equal to the number of households in an economy.
B)   international law requires that income equal expenditure.
C)   every dollar of spending by some buyer is a dollar of income for some seller.
D)   every dollar of saving by some consumer is a dollar of spending by some other consumer.E) A) and D)
F) All of the above

Question 18

A transfer payment is

Accepted Answer

A)   a payment for moving expenses a worker receives when he or she is transferred by an employer to a new location.
B)   a payment that is automatically transferred from your bank account to pay a bill or some other obligation.
C)   a form of government spending that is not made in exchange for a currently produced good or service.
D)   the benefit that a person receives from an expenditure by government minus the taxes that were collected by government to fund that expenditure.E) A) and C)
F) All of the above

Question 19

Periods during which real GDP rises are called recessions.

Accepted Answer

A) True 
 B)False

Question 20

U.S.GDP includes the market value of rental housing,but not the market value of owner-occupied housing.

Accepted Answer

A) True 
 B)False

Exam 23: Measuring a Nations Income

In computing GDP,market prices are used to value final goods and services because

Correct Answer
verified

Which of the following is not a correct statement about the growth of real GDP in the U.S.economy?

Correct Answer
verified

U.S.GDP includes the market value of rental housing,but not the market value of owner-occupied housing.

Correct Answer
verified

Darla,a Canadian citizen,works only in the United States.The value of the output she produces is

Correct Answer
verified

If a state made a previously-illegal activity,such as gambling or prostitution,legal,then,other things equal,GDP

Correct Answer
verified

For an economy as a whole,income must equal expenditure because

Correct Answer
verified

U.S.GDP excludes the production of most illegal goods.

Correct Answer
verified

Table 23-5 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006. -Refer to Table 23-5.In 2007,Batterland's real GDP was

Correct Answer
verified

Table 23-3 The table below contains data for the country of Wrexington for the year 2008. -Refer to Table 23-3.What were Wrexington's government purchases in 2008?

Correct Answer
verified

Correct Answer
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a.
NNP measured in current prices is nom...
View Answer

Consumption consists of spending by households on goods and services,with the exception of

Correct Answer
verified

Periods during which real GDP rises are called recessions.

Correct Answer
verified

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Correct Answer
verified

National income differs from net national product in that it includes business subsidies and excludes

Correct Answer
verified

In the actual economy,households

Correct Answer
verified

The value of goods added to a firm's inventory in a certain year is treated as

Correct Answer
verified

If consumption is $1800,GDP is $4300,government purchases are $1000,imports are $700,and investment is $1200,then exports are $300.

Correct Answer
verified

Greg,a U.S.citizen,works only in Canada.The value of the output he produces is

Correct Answer
verified

Suppose the government passes a law eliminating holidays and,as a result,the production of goods and services increases because people work more days per year (and thus enjoy less leisure per year) .Based on this scenario,which of the following statements is correct?

Correct Answer
verified

A transfer payment is

Correct Answer
verified

Exam 23: Measuring a Nations Income

In computing GDP,market prices are used to value final goods and services because

Correct AnswerverifiedShow Answer

Which of the following is not a correct statement about the growth of real GDP in the U.S.economy?

Correct AnswerverifiedShow Answer

U.S.GDP includes the market value of rental housing,but not the market value of owner-occupied housing.

Correct AnswerverifiedShow Answer

Darla,a Canadian citizen,works only in the United States.The value of the output she produces is

Correct AnswerverifiedShow Answer

If a state made a previously-illegal activity,such as gambling or prostitution,legal,then,other things equal,GDP

Correct AnswerverifiedShow Answer

For an economy as a whole,income must equal expenditure because

Correct AnswerverifiedShow Answer

U.S.GDP excludes the production of most illegal goods.

Correct AnswerverifiedShow Answer

Table 23-5 The table below contains data for the country of Batterland,which produces only waffles and pancakes.The base year is 2006. -Refer to Table 23-5.In 2007,Batterland's real GDP was

Correct AnswerverifiedShow Answer

Table 23-3 The table below contains data for the country of Wrexington for the year 2008. -Refer to Table 23-3.What were Wrexington's government purchases in 2008?

Correct AnswerverifiedShow Answer

Correct Answerverifieda.NNP measured in current prices is nom...View AnswerShow Answer

Consumption consists of spending by households on goods and services,with the exception of

Correct AnswerverifiedShow Answer

Periods during which real GDP rises are called recessions.

Correct AnswerverifiedShow Answer

GDP adds together many different kinds of products into a single measure of the value of economic activity by using market prices.

Correct AnswerverifiedShow Answer

National income differs from net national product in that it includes business subsidies and excludes

Correct AnswerverifiedShow Answer

In the actual economy,households

Correct AnswerverifiedShow Answer

The value of goods added to a firm's inventory in a certain year is treated as

Correct AnswerverifiedShow Answer

If consumption is $1800,GDP is $4300,government purchases are $1000,imports are $700,and investment is $1200,then exports are $300.

Correct AnswerverifiedShow Answer

Greg,a U.S.citizen,works only in Canada.The value of the output he produces is

Correct AnswerverifiedShow Answer

Suppose the government passes a law eliminating holidays and,as a result,the production of goods and services increases because people work more days per year (and thus enjoy less leisure per year) .Based on this scenario,which of the following statements is correct?

Correct AnswerverifiedShow Answer

A transfer payment is

Correct AnswerverifiedShow Answer

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a.
NNP measured in current prices is nom...
View Answer

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